ATTRIBUTION MODELS IN MARKETING WHATS YOU NEED TO KNOW

ATTRIBUTION MODELS IN MARKETING WHATS YOU NEED TO KNOW

ATTRIBUTION MODELS IN MARKETING WHATS YOU NEED TO KNOWWhen it comes to online marketing, few things are as great and overlooked as attribution models. Simply put, attribution models are how you credit different marketing channels for your contributions to a conversion.

At the beginning of your advertising, your attribution model doesn’t matter much. If you get a conversion, it’s usually the result of an individual marketing channel.

Unfortunately, while the marketing journey can be more complex, most marketers continue to rely on simplistic attribution models that may or may not give them a clear picture of how their different marketing channels are contributing to conversions. As a result, making the right marketing decisions can be difficult.

To choose the right attribution model, you need to understand each model, how it works. In this article,

we’ll talk about the basic attribution models ready for you in Google Analytics. So, in an upcoming article, we’ll talk about how to decide which attribution model is right for you.

Why attribution models are important

Before we dive into other attribution models, let’s first explain why we have different attribution models. Sure, Google Ads and Facebook Ads use attribution models to feed their algorithms, but these models are inherently limited.

Because? Because Google Ads analyzes only Google Ads data. Facebook Ads only look at Facebook Ads data.

While multiple platforms can work well together, it’s up to you, as a marketer, to find out how each platform fits into your overall marketing funnel. For example,

If someone visits your site through an organic SEO click and later clicks on one of your paid Google ads, a LinkedIn ad, and finally a Facebook retargeting ad, the recipient credit?

Each of these platforms helped to contribute to the final conversion, but in different ways and at different times.

There are many phases to your marketing funnel, and each interaction with your company encourages your potential customers closer to conversion.

That said, not all interactions are created equal. Your business is unique.

For some companies, the critical point of contact is that first SEO click and everything else is just part of making sure you don’t miss out on the potential customer after your first visit to your site.

For other companies, however, that SEO click can be almost completely irrelevant. Your clients take a long time to mature into leads or sales, so it’s the final click on the retargeting ad that is the deciding factor.

That is why choosing the right attribution model is so important. If you’re making marketing decisions based on which channel produced the last click before conversion, when it’s the first click that matters, you may end up putting a lot of time and effort into the wrong channels.

Google Analytics attribution models

 All of that in memory, let’s take a look at some of the different attribution models you can use. For simplicity, we’ll focus on the attribution models available in Google Analytics, but most analytics platforms offer similar options.

We will refer to this image throughout this article, so I will briefly explain how to read this chart. In short, different columns represent clicks over time.

 

Last click

Last clickThe first attribution model we will talk about is also the most commonly used. Because? As the default attribution model for Google Analytics and, as we mentioned, most marketers don’t have time to think about their marketing funnel and select the right model for their business.

Last click models are also called “Last touch” or “Last interaction” and give 100% credit for a conversion to the last channel that took the user to the site before a conversion.

A slight variation of this model is the Last Click Not Direct model, which gives 100% of the credit for a conversion to the last channel that took that user to the site, ignoring Direct Traffic if that was the last channel.

With this model, it doesn’t matter if someone has visited your site a hundred times on a dozen platforms. Any channel that brought them to your site at the time of conversion receives full credit for the conversion.

As you can probably imagine, this model is only really useful if people almost always click and then convert immediately or don’t convert at all. For example, if you have a very young company and all of your traffic comes from paid search or paid social advertising, this model can be quite accurate.

But even so, if you add redirect to the mix, things quickly become more complicated and this model loses a lot of value.

Did they convert because of the Facebook ad they first clicked on … or because of the Google remarketing ad that finally produced the conversion? With this model, the only platform that will receive credit is Google Ads.

First click

At the opposite end of the spectrum, we have the assignment of First Click – or “First Touch”. With this model, 100% of the credit for a conversion is given to the first channel that took the user to the site before a conversion.

This model is also quite limited, but it has its uses. For example, if you’re in the situation we discussed above, where your business gets the most traffic from paid search and paid social networks, people are only finding you through these channels.

If they happen to convert because of a retargeting ad, that’s fine, but they only saw your retargeting ad because they clicked on some other paid ad in the first place.

In this type of situation, you can use a first click model to see which paid channels are producing the best results. Retargeting only helps to ensure that you don’t lose potential customers due to distractions, but the real sale is happening that first click.

Linear

As you can probably imagine, single-touch models are a bit simplistic for most companies. Your typical site receives clicks from all kinds of places: organic search paid search, paid social, organic social, affiliate links, email campaigns, image ads, offline sources (which usually appear as direct traffic), domain reference… and much more.

For many companies, a new lead or sale can be the result of many clicks or touchpoints. To account for all of these touchpoints, you need a multi-touch attribution model.

The multi-touch attribution model is the linear model. In this model, each click receives the same credit amount for the final conversion.

SEO: 25%

Email: 25%

Facebook Ads: 25%

Google Ads: 25%

The linear model certainly offers a more holistic sense of which channels are involved in producing a conversion, but it is still quite simplistic.

Was that email click as valuable as the click in response to a Facebook ad promotion? How about that final high-intent Google search? To be honest, it all depends on your company, but chances are that not all of those clicks were equally important.

Position-based

The position-based design attempts to integrate the End Click, First Click, and Linear models into a single hybrid model. This model assumes that the most valuable touchpoints on your buyer’s journey are the first and the last, but it also recognizes that other touchpoints can play a supporting role.

Because of its shape, this model is sometimes called a U-shaped attribution model.

By default, Google Analytics gives 40% credit for a conversion to the first touchpoint and 40% credit to the last touchpoint. The remaining 20% ​​of the credit is distributed between any provisional points of contact.

This is a great model for many companies that do aggressive online marketing – mainly through paid advertising channels, such as Facebook Ads or Google Ads.

Paid advertising is the lifeblood of these companies, so they need to know which channels are the best place to focus their efforts, both at the beginning and at the end of the marketing funnel.

Time reduction

The position-based attribution model works well for certain types of businesses, but it also has its problems. For example, if the customer’s journey is long enough, does a new customer’s first click deserve 40% of the credit?

This issue becomes even more important if the initial stages of the marketing funnel are mainly focused on generating recognition (SEO, content marketing, organic social, etc.).

This model has a standard half-life of 7 days. This means that the effective value of a contact point is halved every 7 days.

To show how this works, let’s go back to our previous example where someone accesses a blog post organically, subscribes to your email list and clicks on a link, then clicks on a retargeting ad on Facebook and takes a code promotion. Later, search for your business online and click on a paid search ad before entering the promotional code and converting.

Assuming a week between each contact point, see approximately how much credit would be given to each of these channels:

SEO: 6.25%

Email: 12.5%

Facebook Ads: 25%

Google Ads: 50%

These do not add up to 100%. In reality, it would be more like 53% of Google Ads, 26.5% of Facebook Ads, and so on, but it gets a little confusing, so let’s not worry about that here.

The point is, for longer multi-touch funnels, not all clicks are the same weight. A time reduction model can explain this by assigning a decreasing value to clicks as the time interval between click and conversion increases.

Data-driven

Finally, if you want to do the right things, Google Analytics gives you the option to use your data to customize any of these models to best fit your overall marketing funnel. This is called a data-based attribution model.

For example, you can create your position-based model and distribute credit for conversions however you want (i.e., 30%, 30%, 40%). Or you can create a last touch scenario that skips certain channels other than the direct one.

Data-based attribution models require more work to create, but they have the greatest potential because you can write custom rules to distribute credit as you wish between touch points. The better you understand your marketing funnel, the more you want to create your custom template.

Conclusion

Can you see why following each of these models is so important? If you’re not using a model that reflects how customers interact with your business, you won’t be able to accurately evaluate your channels and make informed decisions.

And unfortunately, you can’t trust Google or Facebook to find that out for you. Ad platforms tend to leverage what I like to call the “any touch attribution model”, that is, if they touch a user at any point in the purchase process, they take credit for the entire conversion.

Google Ads offers attribution models to choose from, but they are intended exclusively for your Google Ads touchpoints. Therefore, when choosing an attribution model in Google Ads,

You are only selecting how to split the credit for this conversion into multiple Google Ads touchpoints, even if there are multiple channels involved in the conversion.

In contrast, when you pick an attribution design on your overall web analytics platform (like Google Analytics), you can see how all of your marketing channels fit into that model. It is a much better way to understand and evaluate your marketing.

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